Texas Regulator Weighs In On NCUA, Accusations
Texas CU Commissioner Harold Feeney's response to a complaint filed by the Texas Coalition for Credit Union members offered up more than just a dismissal of the points made by the group that is opposing the conversion of Plano-based Community CU to a bank charter.
In documents obtained by The Credit Union Journal, Feeney denied any wrongdoing on the part of Community CU with regard to its disclosures, rejected claims that the credit union has attempted to "stifle debate" on the conversion, and even offered his opinion regarding matters under NCUA's purview-an opinion that doesn't seem to agree with NCUA's decision to intervene in the conversion attempts by Community CU and OmniAmerican CU.
With regard to the disclosures, the debate centers on how the documents were folded (see related story above), but Feeney pointed out that there is no discussion of proper folding technique in any of the state or federal statutes, and therefore, were it up to him, he would not disapprove of the disclosures.
Still, Feeney also noted that based upon the disclosures he reviewed, had the "standard convention of folding documents" been followed, the box disclosure should have appeared on front, as NCUA has called for in its notice to the credit union. But members reported they received disclosures folded so CCU's rebuttal appeared first. Among Feeney's other points:
* Though credit unions are run democratically, they are not required to facilitate debate among its membership on conversion proposals.
* There are no rules against a CU locking members out of a meeting if they arrive late, as happened at Community CU.
* There are no rules against escorting a member out of a meeting when that member violates posted notices that campaign materials could not be distributed within 100 feet of the meeting (Feeney also noted his investigation found it was the police officer's decision to oust the member from the meeting, not the credit union's).
* NCUA requirements for a secret ballot make it functionally impossible for CU members to change their votes if they have changed their minds during the balloting period.
* The Texas CU Commission did authorize the disclosure of member information for circumstances related to the daily operation of the CU's business, but release of such information for "voting campaign purposes" is not on that list, so Feeney will not direct CCU to provide conversion-opponents with a contact list of the entire membership.
* There has been no breach of fiduciary aspect because the decision to convert to another type of charter is determined by a vote of the membership and is a matter that is shared in common with all other members.
"Lastly, I would like to note that there is no guarantee that the directors who participated in the vote to recommend to the membership that a conversion take place will be the directors following any subsequent membership votes and regulatory approvals allowing for stock benefits for directors," Feeney said.
Moreover, he suggested that if the coalition wishes to see any of these points change, they must go through the regular process of requesting the commission consider changes to the rule, and the agency, in turn, will then go through its normal rulemaking process. The problem, Feeney pointed out, is that such changes will only apply to future would-be converts, not Community CU.